The microlending loan book value in Namibia increased to N$72 billion in the first quarter of 2024 from N$67 billion in the prior year representing a 79 annual and 02 quarterly growth official figures show
According to the Namibia Financial Institutions Supervisory Authority’s NAMFISA statistical report for the first quarter of 2024 term lender loans continued to dominate with a slight quarter on quarter decline of 07 and a year on year rise of 7 reaching N$68 billion
Term lenders’ loans constituted 95 of the total share during the quarter under review
The report also said the number of payday lender clients grew by 57 far outpacing the 28 rise in term lender clients
The surge reflects a broader trend within the microlending sector where the total value of loans disbursed climbed by 25 to N$1 billion
Payday loans saw a 234 increase in average loan amounts rising from N$2368 in Q1 2023 to N$2921 in Q1 2024 Payday lenders were the main contributors to this growth representing 390 of the total disbursements and term lenders accounted for the remaining 61 the report noted
In contrast term lenders experienced a 163 decline in average loan amounts dropping from N$27408 to N$22938 signalling a move away from long term credit options
Term lender loans continued to dominate with a slight decline of 07 quarter on quarter and a rise of 70 year on year reaching N$68 billion Term lenders’ loans constituted 950 of the total share said NAMFISA
Mirroring the rise in the value of disbursements the number of new loans issued increased during the first quarter of 2024 reaching 166452 loans a 98 increase quarter on quarter and a 161 increase year on year
The growth in new loans aligns with the increase in loans issued by both term and payday lenders Regarding the distribution of new loans payday lenders dominated issuing 830 of all new loans and term lenders accounted for the remaining 170 said the quarterly bulletin
Meanwhile the total arrears showed a downward trend decreasing by 10 quarter on quarter but increasing by 79 year on year to N$15 billion at the end of the first quarter of 2024
Arrears accounted for 200 of the total loan book value at the end of this period which indicates the potential risk of borrowers defaulting on their loans said the report
The total arrears for term borrowers stood at N$14 billion at the end of the first quarter of 2024 representing a default rate of 200 of the loan book value for term lenders
Compared with the previous quarter this reflects a downward trend with a decrease in arrears by 21 but with an increase of 67 year on year The age category of 120 days+ accounted for the largest share of arrears at 120 of the total value and the 30 60 days category represented 60 These figures highlight the potential of repayment difficulties among term borrowers the authority said
Meanwhile the arrears for payday borrowers amounted to N$742 million with a default rate of 220 accounting for 760 of the payments due in the first quarter of 2024
Within the different age categories the 120 days+ category represented the largest portion of the total arrears making up 120 by the end of the first quarter of 2024 said NAMFISA
